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London - European stocks fell as investors assessed the biggest monthly advance since November on the final trading day of April.
British Airways parent IAG SA lost 4.7%, dragging travel and leisure shares to the worst performance among industry groups, after saying last month’s Brussels attacks will affect second-quarter revenue. Sanofi fell 4.1% after its sales missed projections. Royal Bank of Scotland Group paced a drop in lenders, down 4.6% after its net loss widened.
The Stoxx Europe 600 Index declined 1.6% in London, as all 19 industry groups fell. The euro strengthened against the dollar as weak US growth dimmed prospects for a rate hike there, while the Standard & Poor’s 500 Index yesterday fell the most in three weeks as Apple led a late selloff in technology shares.
“European markets are reacting to negative swings in the US, and with the euro stronger against the dollar, this doesn’t bode well for earnings expectations in Europe,” said Otto Waser, chief investment officer at R&A Research & Asset Management. “With risks bigger than opportunities, this could be the beginning of a profit-taking phase.”
European stocks have climbed in April, reaching the highest level since January last week, led by a rally in miners and energy producers. The Stoxx 600 is heading for a monthly advance of 1.7%. Still, today’s decline is poised to drag the gauge to its first weekly loss in three, down 1.5%.
The earnings season is well under way, and analysts have slashed estimates for the year. They project profit at Stoxx 600 companies will slide 2.2% in 2016, before growing at a double-digit pace in the next three years. Data today showed euro-area consumer prices fell more than forecast, even as the economy expanded at a faster-than-estimated pace.
Spanish and Italian equities are among the biggest gainers in Western Europe this month, with the IBEX 35 Index and the FTSE MIB Index up more than 3.8%. Ireland’s ISEQ Index is poised for the worst performance, down 2.2%.
Among other shares active on corporate news today, Restaurant Group plunged 25% after the UK owner of Frankie & Benny’s eateries forecast a further deterioration in sales and said it has started a strategic review.
Danske Bank A/S gained 3.4% after its net income topped projections. Linde rose 1.2% after its profit in the first three months of the year beat estimates. Technicolor SA jumped 18% after its quarterly revenue surged and the media technology company confirmed its 2016 targets.
